The company has stated that it is not surprised by the FTC's interest due to the novel nature of these technologies and commercial arrangements. Reddit maintains that it has not engaged in any unfair or deceptive trade practices. The company also noted that it is adjusting its risk factors to account for the FTC investigation, acknowledging that regulatory engagements can be lengthy, unpredictable, and potentially harmful to its business.
Key takeaways:
- Reddit has disclosed that the Federal Trade Commission (FTC) is conducting a non-public inquiry into its licensing of user-generated content to AI companies for training their models.
- The company received a letter from the FTC on March 14, 2024, expressing interest in the company's plans and indicating that it would request further information and documents.
- Reddit filed its form S-1 with the SEC last month, revealing details about the company and its plans for an expected initial public offering (IPO).
- The company is adjusting its risk factors to account for the FTC investigation, acknowledging that regulatory engagements can be lengthy, unpredictable, and potentially harmful to the company's reputation and financial condition.